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Railroads: STB Reauthorization Bill Would Undercut Industry’s Ability

To Invest In Rail Network To Serve Shippers

WASHINGTON, D.C. – Sept. 16, 2014 – The Association of American Railroads (AAR) is expressing concerns over the Surface Transportation Board (STB) Reauthorization Bill (S.2777), scheduled to be marked up in the Senate Commerce Committee on Wednesday, September 17, 2014.

The AAR says if allowed to proceed as is, the legislation would harm the nation's railroads’ ability to move what the economy demands and deliver the service shippers expect. The railroad industry would not be able to continue to reinvest record amounts of private capital into the freight rail system if the STB Reauthorization Bill passes in its current form. ​

AAR President and CEO Edward R. Hamberger says railroads have several serious concerns with the bill, beginning with the legislation directing the STB to pursue regulations that could cap rates and require railroads to turn over traffic to competitors.

"The rail industry believes this legislation will harm the ability of the nation’s railroads to invest in the network and improve service for our shippers,” said Hamberger, who noted railroads are moving the most freight in the last seven years and commodities, such as grain, are up double digits over this time last year. “These new restrictive regulations would be imposed on the nation’s railroads at a time when investments in capacity, new equipment and new hires are needed.”

Additional sections of the proposed legislation would also negatively impact the rail industry:

The legislation would direct the STB to prevent railroads from using the approach commonly used by railroads and shippers alike in contract negotiations to “bundle” offers, but would allow shippers to continue to do so. The AAR says the STB has no authority over rail contracts and should not be directed to interfere in agreements that are arms-length transactions freely entered into by both parties.

The STB already has broad regulatory oversight over the railroads; however, the legislation would give the STB expanded authority to launch investigations of a railroad even where no complaint against the railroad has been lodged.

"On the one hand everyone wants to see capacity grow and traffic flow unimpeded, and on the other hand there are those that want to undercut our very ability to get the capital necessary to invest. This is a perfect example of you simply can’t have it both ways,” added Hamberger. "America's rail industry is urging policymakers not to rush this legislation and instead give all stakeholders the opportunity to have a more productive conversation to try to find common ground.” ​

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For more information contact: AAR Media Relations at media@aar.org or 202-639-2345.

About AAR: The Association of American Railroads (AAR) is the world's leading railroad policy, research and technology organization focusing on the safety and productivity of rail carriers. AAR members include the major freight railroads of the U.S., Canada and Mexico, as well as Amtrak. Learn more at www.aar.org. Follow us on Twitter: AAR_FreightRail or Facebook: www.facebook.com/freightrail.